The suspension of rail transport for parts of 2006, along with the collapse of the national rail service and some of the airlines, exacerbated the economic problems that had emerged in 2005 and caused national unemployment to reach double digits by December. The GDP declined again, as both the manufacturing and retail sectors suffered. The federal deficit as a percentage of GDP reached a new high, because the government needed to pay for additional security measures but, with the economy in such poor shape, didn't dare to raise taxes.
At the beginning of the year three decisions demon- strated the differences between America and Europe yet again.
First, Chuck Hagel, a Republican senator from Nebraska, sponsored a resolution calling on the administration to reach out to the Islamic world with a number of specific proposals and to join the proposed EU Tolerance and Reconciliation Initiative. For several years Hagel had been articulating a foreign-policy strategy based on the "humble" approach promised by President Bush before 9/11.29 Early in 2007 the administration rejected the Hagel resolution as "buckling under to terrorists." The plan went down to defeat in the Senate.
Second, the European Union reached a compromise on the issue of admitting Turkey. The EU president claimed that Turkey's membership would destabilize the "Christian EU" and flood Europe with Muslim immigrants.30 Turkey agreed to a limit on immigration and was admitted. The EU passed the Tolerance and Reconciliation Initiative and opened talks with the nations of the Islamic Conference.
Third, the United States and Europe parted ways over what to do about "definitive intelligence" showing that Iran had six nuclear devices ready to be mounted on mobile long-range missiles. The war on terror had, admittedly, distracted U.S. national-security officials from dealing with Iran and nuclear proliferation generally.31
We had suspected that Iran had assembled some nuclear weapons, but only owing to the good work of the British Secret Intelligence Service did we learn that all the weapons would be in one place at one time. The president decided to launch a pre-emptive attack; given the circumstances, he could hardly have done otherwise. The B-2 strike in May did indisputably destroy all the mobile missiles and their launchers. (Regrettably, it also killed some Chinese defense contractors.) To the president's dismay, the attack apparently did not destroy any of the nuclear warheads, because they had not yet arrived at the base. Intelligence is still not good enough to provide precision. The good news was that without their missiles, the Iranians had very few ways of using their nuclear warheads. The bad news was that this revived fears that the warheads would fall into terrorist hands.
The Iranians responded to the attack by launching their older SCUD missiles, armed with conventional warheads, at the Saudi oil facilities at Ras Tanura. Iranian navy units attacked Saudi tankers. The result of all this was quite unsettling, both to regional stability and to the U.S. economy. World oil prices spiked to $81 a barrel, before falling back to $72 a month later.
Then, on the day before Thanksgiving, Hizbollah, the Iraqi Shia militia, and special operatives of Iran's elite Qods ("Jerusalem") Force acted.32 (They no doubt chose that day because it was then still a relatively heavy travel day in America.) "Stinger Day," as it came to be known, did not actually involve Stinger missiles, as originally thought. Rather, the missiles were SA-14s and SA-16s stolen from Iraqi army stockpiles way back in 2003, after the U.S. invasion. The United States had failed to secure the Iraqi weapons depots, giving terrorists an opportunity to help themselves to Saddam Hussein's guns, explosives, and missiles. The missiles were later smuggled across the Canadian border into Minnesota, Washington, and Montana.33
SA-14s and SA-16s are much like Stingers, heat-seeking and easily portable. The four missile strikes that succeeded that day (in Atlanta, Chicago, Miami, and Los Angeles) were all aimed at 767s. The death toll was nearly 1,200, including those who died on the ground where the aircraft crashed. There is some dispute about whether three or four additional attempts failed in other cities. The most widely reported incident involved the killing by New Jersey state police officers of two Lebanese Hizbollah members who had been discovered sitting in a car with an SA-14 on a police ramp over I-95 next to Newark International.
Scarcely six years after 9/11 had briefly shut down commercial aviation and driven several major airlines into bankruptcy, the same thing occurred again. Hundreds of thousands of Americans were stranded for days that weekend. The Air Line Pilots Association refused to allow its members to return to the skies until all U.S. aircraft had been equipped with defenses against surface-to-air missiles, such as the ones used by Israel's air fleet.34 Airline executives halted flights until troops had been deployed along all the takeoff and landing corridors at airports. Even then few people flew. In truth, the "legacy carriers," those airlines left over from the days when the industry was federally regulated, such as Delta, US Airways, and United, would probably have failed anyway. They already had crushing debt, and had been in and out of bankruptcy since 9/11. Their basic economic model (relying on outdated "hub and spoke" systems) was flawed, and they lacked the versatility of the regional carriers. In any event, having exhausted all federal loan guarantees and direct bailout packages, the remaining legacy airlines were closed down and broken up.
The emergency program to develop infrared countermeasures for civilian passenger aircraft is one of the best examples of America's using its high-tech advantage to battle the terrorists.35 The IRCMs were produced at a cost of less than $2 million per aircraft, and 2,000 were installed (at taxpayer expense) before the next Thanksgiving rolled around. Today we have almost 4,000 in place on the two new major U.S. airlines that have supplanted the old carriers. It has taken four years, but travelers are slowly returning to the air.
The U.S. bombers that struck Iran had been refueled from and then landed in Saudi Arabia. This gave fundamentalist forces in that country the spark and the distraction they needed to finally stage a coup against the regime, which they did in August. The coup succeeded, and the House of Saud was driven out, at which point the price of oil reached the vicinity of $85 a barrel and stayed there.
The Saudi coup marked one of the worst U.S. intelligence failures in years. We were caught off guard because we had not been able to effectively collect intelligence inside "the kingdom," as it was then called. We relied on the Saudi Ministry of the Interior to tell us how strong the jihadis were, and whether there was serious opposition to the king. As it turned out, opposition was widespread, even among the royal family and the Saudi National Guard that had been created to protect it.36
The main stimulus for the coup probably came from the many Saudis who had returned from neighboring Iraq, where they had been radicalized by their experiences fighting the U.S. occupation. Osama bin Laden's final, pre-death request, captured on video and broadcast worldwide on al-Jazeera and other media networks, was that the royal family be deposed. It unexpectedly unified a variety of Saudi dissident groups.